The pandemic has caused an increase in funds for distressed commercial properties with nowhere to spend it. Overall, the housing market is looking up, and American consumers are feeling optimistic about the economy as vaccine distribution continues. Virtual staging technology continues to thrive as the pandemic wanes, suggesting that no-contact real estate technology may be here to stay.
Nowhere to Spend Record Amount of Money Designated for Distressed Commercial Real Estate
- Investors are growing desperate trying to spend the money they had put aside for distressed commercial properties.
- Unlike during the 2008 financial crisis, there are more incentives for people to hold onto their commercial real estate. Meaning, much less inventory of available commercial properties.
- Commercial real estate value has increased during the last year and there are more federal programs to help keep businesses in their buildings. With more people getting vaccinated and returning to normal life, business forecasts are looking up–reducing the need for them to leave their brick and mortars.
- Have you ever tried to shove three or more people through a small doorway at the same time? They call this the “Three Stooges effect”, the same thing is happening with investors trying to jump at the few Commercial deals available.
American Consumers are Getting More Optimistic
- According to a report from the University Of Michigan, Consumer optimism is seeing its biggest jump since the pandemic.
- This increased confidence in the economy will have a positive effect on the housing market.
- The CDC recently announced that it is extending its Pandemic-era eviction moratorium through June 30th, giving consumers another reason to be positive.
At least until July 1st.
- As vaccine distribution continues and the pandemic wanes, home sales continue to increase, NAR’s chief economist predicts this year’s home sales will eclipse last year’s.
There is a Brighter Path Ahead
- The pandemic-induced recession was unique in that despite all of the jobs suddenly lost, it was the first recession in history where income actually grew.
- Total income for the country in late 2020 grew by 4% over the year before, and this is before the second stimulus checks hit in December.
- The housing market has remained robust, despite the pandemic. The only frustration for buyers has been the ridiculous amount of offers they are competing with.
- Builders are increasing production of homes with backyards, which are now seeing their highest levels in 13 years.
To learn more about how these industry changes affect your business, schedule a business analysis with our real estate experts today!